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(Bloomberg Opinion) -- No dictator rules without a nation’s acquiescence, but in Russia in 2019, President Vladimir Putin has found that acceptance increasingly reluctant. His reaction: an increasing reliance on the stick as the carrot harvest fails to come in.Putin discovered in 2018 that the world could be easier for him to manipulate than his own country. As the geopolitical architecture he started creating with the 2014 Crimea annexation took shape, his popularity at home took a dive — thanks to a necessary but highly unpopular pension reform, including a steep increase in the retirement age . Protest activity spiked. By the end of last year, Putin had resolved to tear his eyes away from the world map and look toward the Russian heartland, where the pro-Kremlin United Russia party had suffered some painful electoral defeats.This year, however, Putin’s effort to win back Russia’s affection has been unsuccessful. This affects the prospects of a smooth power transition in 2024, when he is supposed to step down because of the constitutional term limit. In late 2018, Putin and his foreign-policy advisers made it clear that they considered any kind of firm international order gone. In such a world, global leaders protect what they see as national interests on a transactional basis, building no firm alliances and instead making it clear why others might find it to their advantage to cooperate with them in specific areas. This year, Russia’s offering in the geopolitical marketplace coalesced.Russia’s previous bet was on its vast energy resources — in the 2000s, as the oil price spiked, there was even talk of the country becoming an “energy superpower.” In 2019, this old strategy began bearing fruit. Gazprom PJSC, the gas-export monopoly the Kremlin uses to project its energy power (and enrich Putin’s friends through infrastructure contracts), completed two major pipelines: the offshore part of TurkStream, crossing the bottom of the Black Sea to Turkey, and Power of Siberia, bringing Russian natural gas to China. Though the construction of Nord Stream 2 under the Baltic Sea to Germany has been slowed down by European regulatory obstacles, inclement weather and perhaps by belated U.S. sanctions, it will be completed next year. Then Putin’s old scheme for making Russia indispensable to key neighbors (the Balkan nations, China, Germany and Turkey) will be complete, too. The gas project, however, will fall far short of conferring any kind of superpower status on Russia. Discoveries of new gas deposits and the growth of the global liquefied natural gas trade have created healthy competition among suppliers in all key markets.Besides, the European Union, Russia’s key energy export market, is aiming for carbon neutrality by 2050 with an ambitious plan to develop renewable energy sources. Sooner or later, China, too, will start phasing out fossil fuels. Russia’s long-term strategy needs to be based on something other than hydrocarbon exports.Putin now appears to have found that something, and a way to package it as an offering: The agile use of military force and what’s come to be known as hybrid capabilities — hacking, propaganda, diplomacy — in support of beleaguered incumbents who are mostly considered undesirable by the West. The Russian-engineered victory of President Bashar al-Assad in Syria is the window display for this offering. But Putin also can nod toward Venezuelan President Nicolas Maduro’s ability to retain power, even though the West has recognized his challenger as the nation’s legitimate leader and the U.S. has hit him with powerful sanctions. Russian support never rose to the level of a military operation, but it has helped sustain the Maduro regime even as Venezuelans fled in droves from the economic hardship it has inflicted on them. Putin’s offer of support to regimes considered rogue under the old, U.S.-led international order harks back to the Romanov czars’ policy of unconditionally supporting monarchies against revolutions. It has made Putin some important friends. One is Turkish President Recep Tayyip Erdogan, who purchased Russian S-400 anti-aircraft systems, defying U.S. pressure to cancel the deal. Another is Saudi Crown Prince Mohammad bin Salman, who retained a cordial relationship with Putin as the Western world boiled up about the his apparent role in the murder of dissident journalist Jamal Khashoggi. This year, Russia developed a cooperative relationship with Turkey in Syria, and its cooperation with Saudi Arabia has been a major factor for the global oil price. Putin has also started openly marketing his offering to African nations: In October, he gathered several dozen African leaders in Sochi to signal that Russia could be called on to help settle disputes in exchange for natural-resource concessions. Russian mercenaries have shown up in the Central African Republic, Libya and Sudan. Unexpectedly, Putin’s transactional worldview has found some intellectual followers in Europe, most notably French President Emmanuel Macron, who openly questioned Europe’s transatlantic relationship and suggested that a cautious rapprochement with Russia was in order. Macron is no Putin ally, but he’s clearly turning into a like-minded thinker concerning the absence of a world order worth defending. And Putin isn’t looking for allies, anyway — just for means to assert Russia’s global role.But the growing acceptance of Putin’s geopolitical thinking hasn’t converted yet into any practical benefits for the Kremlin, such as the softening of European sanctions, a lasting solution to the Ukraine crisis, or substantial economic dividends from the Middle East and Africa. And that feeds into Putin’s domestic problem, which is primarily economic. Russians’ relationship with Putin is, deep down, as transactional as his interactions with foreign leaders. It’s an alliance of convenience: His popularity is still largely based on the quick rise in living standards in the first half of his long rule. As 2018 showed, the so-called Crimea consensus — a jump in his popularity after the annexation — was only a short-lived burst of imperialist enthusiasm. In 2019, Putin attempted to work some of his old economic magic, starting a dozen so-called “national projects” worth $400 billion until 2024. They are meant to improve health care and education and spruce up Russia’s infrastructure.It’s clear, however, that this year, the projects will end up seriously underfunded. Alexey Kudrin, head of Russia’s budgetary watchdog, the Accounting Chamber, met with Putin this week to tell him that only 67% of the planned 2019 funding for the projects had been released by November. On some, have barely used any of the allocated funds have been spent. The money is there, but the bureaucrats administering the programs are too cautious to dispense it. According to Kudrin, this year, up to a trillion rubles ($16 billion) allocated under the Russian federal budget will remain unspent.“No, no, that sounds like a lot,” was Putin’s reaction to Kudrin’s data. But the funding bottleneck is obvious. In a system geared to achieve growth through government investment, while private initiative is distrusted and often suppressed, public funding isn’t flowing because the risks of Russia’s harsh law-enforcement system are too high for people in charge of that funding.In part because of this, and in part because Russia’s problems can’t really be solved with government money, 2019 has been a dismal year for the “national goals” set by Putin for his current presidential term. According to the Accounting Chamber, Russia actually moved away from some of these goals. Other goals, such as steadily increasing real incomes, appear to have been reached with the help of statistical sleight of hand. In the third quarter of 2019, real incomes reported by the government — based on a recently-updated methodology — suddenly jumped 3% year on year, with many economists doubting the underlying data.Putin can no longer hope to keep shaping Russians’ perceptions of their country’s condition, and of their own, through propaganda. In May, Mediascope, a media measurement company whose data are used by advertisers in Russia, reported that the internet, for the first time, had a bigger audience in Russia’s cities than TV. Yes, young people the world over watch less TV and spend more time on the internet. But in Russia, this is particularly important because TV is a state-controlled propaganda machine, and the internet, despite the presence of pro-Kremlin troll farms and increasing censorship and surveillance, is still largely a free forum. No wonder younger Russians have been the driving force of this year’s protests, notably in Moscow over the summer, after the pro-Putin mayor prevented a number of anti-Putin candidates from running in a municipal election, but also in other places such as the Arkhangelsk Region in northern Russia, where locals have been fighting the creation of a gigantic landfill. Protest activity in Russia has dropped off somewhat since its peak after the pension reform was announced, but it hasn’t dipped back to the level of 2017. According to the Center for Social and Legal Rights, 207 of the 581 protests held in the third quarter of 2019 were of a political nature, and 149 were environmental.Putin’s reaction was to crack down. A number of participants in the Moscow protests were sentenced to prison terms or given suspended sentences for offenses such as throwing empty plastic bottles at fully-equipped riot police. Putin explained his support for the harsh punishments during a recent meeting with his Human Rights Council, which he purged of potentially disloyal liberals this year:He tosses a plastic cup at a representative of authority. Nothing happens. Then a plastic bottle — nothing happens. So he’ll toss a glass bottle, then a stone, and then people will start shooting and looting stores. We must not allow this kind of thing.This willingness to punish people before they become truly dangerous is in line with Putin’s other moves this year. He signed the Russian version of a lese majeste law, and numerous people have been fined for insulting the president online. He also approved a law making it possible to designate people as “foreign agents” for sharing articles from media funded by foreign governments or for working for foreign-funded organizations.Putin is trying to make his regime coup-proof by creating a kind of early-warning system regarding citizens who consider protesting for political, economic or environmental reasons— about a quarter of the country’s adult population, according to pollster Levada Center. The tactic says a lot about Putin’s skill, experience and foresight as a repressive leader, but it hardly boosts his popularity. Though Putin’s approval rating technically is near 70%, Russian poll data are distorted by the unwillingness of ordinary people to criticize the authorities to strangers; the current approval rating is nonetheless near historic lows.In “Putin v. the People” — in my view, the most insightful book on Russian politics published this year — Graeme Robertson and Samuel Greene wrote that Putin’s popularity is “the only thing holding the ship together” for the Kremlin regime. That means, they went on:When position and power depend heavily on the citizens — on their reading of their social surroundings, their sense of consensus, and the breadth of their imaginations — this support can disappear almost overnight. Putin’s power will crumble when we least expect it. If Putin understands that, and I suspect he does, his persistent inability to improve his ratings must be an important factor in his thinking ahead to 2024. Should he try to stick around by some trick, or should he try to hand over power to a trusted successor, as he did with Dmitry Medvedev in 2008?The former scenario is complicated by a dearth of options. For example, the Kremlin has put pressure all year on neighboring Belarus to move toward a merger with Russia — a scheme that could install Putin as leader of the new combined entity, without the need to change the Russian constitution. But Putin’s meeting earlier this month with Belarussian President Alexander Lukashenko ended without any progress. Lukashenko has successfully staved off a merger deal, which is unpopular in Belarus, despite his authoritarian regime’s economic dependence on Russia.The handover scenario, for its part, looks iffy if Putin risks becoming less popular than the successor. Earlier this year in Kyrgyzstan, the ex-president tried to grab back power from a chosen successor who’d fallen out of line, but was thwarted and imprisoned because he’d miscalculated his support. Keeping the enforcement apparatus well-funded and devising a way to cling to power after his term ends appear to be Putin’s best option if Russia is to continue down the path on which he set it — and if he, his family and friends are to live happily beyond 2024. Putin would no doubt prefer being loved for his successful economic policies, but if this year is any indication, that’s the least likely scenario of all.To contact the author of this story: Leonid Bershidsky at email@example.comTo contact the editor responsible for this story: Tobin Harshaw at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The state has until midnight on Friday to inform PG&E if its plan, including a $13.5 billion settlement with victims of wildfires blamed on the company's power lines, meets criteria established under the statute, known as Assembly Bill 1054, which was enacted in July. Newsom was expected to make a public statement on the reorganization plan on Friday night, according to a spokesman for the governor, Nathan Click. If Newsom decides PG&E's plan falls short, the company would still have until Tuesday to propose changes to meet the state's demands, a necessary step before it can submit its plan for a vote by creditors and final approval from a bankruptcy judge in San Francisco.
The decision by Newsom, sent to PG&E in a letter, complicates the company's push to exit bankruptcy and provide billions of dollars to victims of devastating wildfires in 2017 and 2018 sparked by the utility's power lines. The embattled utility now has until Tuesday to further amend its plan to Newsom's satisfaction, but his criticism of the reorganization package as it was presented by PG&E a day earlier was sweeping.
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Donald Trump says China will spend $50 billion a year for U.S. farm products as part of a “phase one” trade deal between the countries. But doubts are surfacing whether that’s even possible, bolstered by China’s reluctance to confirm the figure.While the president expressed confidence China would meet the goal “pretty soon,” doing so would require a huge jump in China’s imports, potentially stretching its capacity to absorb the products. Trump’s trade representative, Robert Lighthizer, laid out some numbers to reporters, but declined to get very specific.Meanwhile, Chinese officials repeatedly didn’t answer questions on the exact size of their commitment in a briefing Friday.“I have been very skeptical,” said Joseph Glauber, a former chief economist at the U.S. Department of Agriculture. “How would they do it?”The $50 billion figure offers Trump an attention-grabbing number to drive up enthusiasm for the deal in rural America. That’s a key political constituency for the president as he campaigns for re-election. It also helps him to defend a partial deal that leaves out many of the objectives he set when he initially launched the trade dispute.Prices for soybeans and hogs initially surged Friday as the deal was announced, but later retreated after Chinese officials said their imports would increase by “a notable margin,” but refused to be more specific.The annual purchase amount touted by Trump in comments in the Oval Office Friday would be more than double the $24 billion in agricultural and related products that China imported from the U.S. in 2017, the year before the trade war began. The most China ever purchased from U.S. producers was $29 billion in 2013.U.S. Agriculture Secretary Sonny Perdue said Thursday that Chinese officials told Trump they would buy $40 billion to $50 billion worth of farm goods, but were reluctant to commit to contracts. Trump has regularly touted the commitment since announcing a deal in principle in October, sometimes casting the purchase in that range and sometimes just using the higher number.Lighthizer suggested that the higher figure is aspirational. He told reporters Friday that China has agreed to raise its annual purchases of U.S. agricultural goods to $40 billion annually for the next two years and make its best efforts to reach $45 billion per year. Beijing agreed to specific benchmarks for individual commodities but those will be classified, he added. The goals will be re-examined after that, a U.S. trade official said.The Chinese purchases will include processed food products, according to a person familiar who asked not to be named discussing proprietary information. China is studying whether it can reach $50 billion in purchases without having to pay above-market prices. For example, China won’t buy agricultural products from U.S. producers to meet the target if it can purchase them for less from competitors such as Brazil, the person said.Soybeans have been the main U.S. export to China, accounting for about half the total value. A large part of the imports have been used in the past to feed China’s pig herds. Now, though, the pig population has been devastated by African Swine Fever over the last year, and demand for feed is weakening.Brazil RelationistA big jump in U.S. soybean purchases may also serve to upend China’s relationship with Brazil, it’s other major agricultural supplier. That could trigger “a major trade dispute” between China and Brazil, according to Glauber, who is now a fellow with the International Food Policy Research Institute.While U.S. exports of pork and possibly poultry and beef could rise as a result of the swine fever epidemic, U.S. pork exports worldwide last year only amounted to about $6.4 billion. A 50% boost to that total would only add about $3.2 billion, and could drive up meat prices for U.S. consumers anyway, Glauber said.Nor are the Chinese likely to reach such a purchase level through products such as corn, sorghum, distiller dried grains and ethanol, he said. Total U.S. exports of corn, soybeans, beef and pork to the entire world only averaged $44.2 billion from 2014 through 2018.American Farm Bureau Federation President Zippy Duvall said in a statement the organization is “eager to learn the details of China’s commitment to purchase more agricultural products.”(Updates with additional detail beginning in seventh paragraph)\--With assistance from Isis Almeida, Josh Wingrove and Jenny Leonard.To contact the reporter on this story: Mike Dorning in Washington at email@example.comTo contact the editors responsible for this story: Joe Sobczyk at firstname.lastname@example.org, ;James Attwood at email@example.com, Reg GaleFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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(Bloomberg) -- Mercedes-Benz is putting off the U.S. debut of its first electric vehicle by a year in the latest sign of just how difficult a time automakers are having replicating Tesla Inc.’s success.Daimler AG’s luxury brand will start sales of the EQC crossover in 2021 rather than early next year. The German carmaker said in an emailed statement that it’s made the strategic decision to first support growing demand for the model in Europe, where deliveries began earlier this year.The world’s top-seller of premium autos has touted the EQC and the series of battery-powered models it has planned under the EQ sub-brand as an answer both to Tesla and its traditional rivals. But the initial electric vehicles Jaguar and Audi introduced in the U.S. market this year have underwhelmed on the sales charts, failing to keep up even with Tesla’s years-old Model S and X.Daimler has at least 10 purely battery-powered cars planned through 2022 to help meet tougher emissions rules around the globe. But while regulatory pressure is picking up, U.S. demand has been tepid for models other than Tesla’s lower-priced Model 3. Consumers continue to harbor concerns about limited driving range, long charging times and high sticker prices.Jaguar has sold 2,418 I-Pace SUVs in the U.S. this year through November, while Audi has delivered 4,623 e-tron crossovers, according to InsideEVs. By contrast, the website estimates that Tesla has sold about 111,650 Model 3 sedans.Luxury-car makers’ biggest retailers are divided over the outlook for electric cars in the U.S. In February, the president of Sonic Automotive Inc., the fifth-largest U.S. dealership group in the country, wondered aloud on an earnings call whether Tesla had built a cult following for its cars and said the brand needed to be taken seriously by BMW and others.But in October, Roger Penske, the chief executive officer of Penske Automotive Group Inc., said the I-Pace hasn’t sold as expected and that consumers have been canceling orders for the e-tron.“They’re expensive, and everyone has range anxiety, and to me, what’s going to be the residual value at the end?” Penske said during an earnings call. “The growth is going to be slow.”Automotive News first reported Mercedes’s decision to delay the EQC earlier Friday.\--With assistance from Christoph Rauwald.To contact the reporter on this story: Gabrielle Coppola in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Craig Trudell at email@example.com, Chester DawsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Is Radiant Logistics, Inc. (NYSE:RLGT) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds […]
T-Mobile and Sprint have already received approval for the deal from the U.S. Department of Justice and the Federal Communications Commission (FCC), after the companies agreed to sell Sprint’s prepaid phone business and some spectrum to satellite TV provider Dish, which has committed to building a nationwide wireless network and becoming a competitor in the industry. The states have argued that Dish has a history of stockpiling FCC licenses for wireless spectrum, or airwaves that carry data, and has not yet demonstrated that it can build a wireless network.
"The global economic environment is very favorable for investors. Economies are generally strong, but not too strong. Employment levels are among the strongest for many decades. Interest rates are paused at very low levels, and the risk of significant increases in the medium term seems low. Financing for transactions is freely available to good borrowers, […]
How do we determine whether Tower Semiconductor Ltd. (NASDAQ:TSEM) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows […]
A jury in Los Angeles awarded the damages after finding that Yescarta, a treatment sold by Gilead's Kite Pharma unit, infringed on a patent exclusively licensed by Bristol-Myers' Juno Therapeutics division. The patent at issue in the lawsuit, which Juno licenses from the Memorial Sloan Kettering Cancer Center in New York, relates to CAR T-cell immunotherapy for cancer.
Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that's why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an […]